Getting flagged by ChexSystems can feel like an unexpected roadblock when you’re trying to open a new bank account. Many banks rely on ChexSystems to check your banking history, so if you’ve had unpaid fees, overdrafts, or closed accounts, it might be tough to start fresh.
But don’t worry—there are ways to work through it and improve your chances of getting back into good standing with banks. Whether it’s reviewing your report for errors or disputing inaccurate information, there are steps you can take to get out of ChexSystems and move forward.
How long does it take to get out of ChexSystems?
Federal regulations allow ChexSystems to keep records for up to seven years. However, ChexSystems only keeps records for up to 5 years. If you don’t want to wait that long, you can dispute the accuracy of your record to get out of ChexSystems early.
ChexSystems Removal: 4 Steps to Reclaim Your Banking Options
If ChexSystems has flagged you, it can limit your ability to open new bank accounts or access financial services. However, you don’t have to sit on the sidelines waiting for the issue to resolve itself.
By following a series of practical steps, you can challenge errors, address old debts, and possibly clear your name from ChexSystems sooner than the standard five-year reporting period.
Here’s a straightforward guide to help you navigate the process and improve your banking prospects.
Step 1: Order a Free ChexSystems Report Online
The first step in tackling your ChexSystems record is knowing exactly what’s on it. Thanks to the Fair Credit Reporting Act (FCRA), you’re entitled to a free copy of your ChexSystems report once a year, similar to how you can request credit reports from the major bureaus. Ordering this report gives you insight into the details that might be holding you back, whether it’s unpaid fees, overdrafts, or other banking mishaps.
You can easily request your ChexSystems report in three different ways:
- By phone: Call 800-428-9623 to order your report through their automated system.
- Online: Visit the ChexSystems website and fill out the consumer disclosure form to submit it electronically.
- By mail: Download the form from their website, print it out, and send it via certified mail to:
Chex Systems Inc.
Attn: Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, MN 55125
Once you have your report, review it thoroughly to spot any issues or inaccuracies. This is a critical step, as you’ll use this information to dispute any errors or outdated information that could be removed from your record.
See also:
- Banks That Don’t Use ChexSystems
- Credit Unions That Don’t Use ChexSystems
- Best Second Chance Checking Accounts
Step 2: Evaluate Your ChexSystems Record for Accuracy
After receiving your ChexSystems report, it’s time to dig into the details. The Fair Credit Reporting Act (FCRA) requires all information provided to consumer reporting agencies to be accurate, so even small errors could be grounds for a dispute. Common mistakes might include incorrect dates, inaccurate amounts, or even accounts that you don’t recognize. Here’s what to look for:
- Dates of transactions: Make sure the dates of any overdrafts or unpaid fees are correct.
- Amount of debt: Check if the amounts reported are accurate and reflect what you actually owe.
- Account details: Confirm that the account numbers and bank information match your records.
- Unfamiliar accounts: If you don’t recognize an account, it could be a reporting error, which is a strong case for dispute.
Even if everything looks accurate, you can still request verification. Sometimes banks fail to keep proper records of old debts, and without validation, the information may need to be removed from your ChexSystems report.
Step 3: File a ChexSystems Dispute
If you spot errors or suspicious activity in your ChexSystems report, the next step is to file a dispute. Under federal law, ChexSystems is required to investigate any disputes within 30 days, during which they will contact the bank that provided the information to verify its accuracy. To get started, you’ll need to:
- Write a dispute letter to ChexSystems explaining the specific errors in your report.
- Attach a copy of your ChexSystems report with the disputed items highlighted for clarity.
- Keep a copy of everything you send for your records.
You can send your dispute online, by mail, or by fax. ChexSystems will investigate your claim and respond with the results. If they cannot verify the information, they are legally required to remove the disputed entry from your record.
Don’t get discouraged if your first dispute doesn’t lead to an immediate removal. The key is to create a paper trail of your efforts, which can help build your case if you need to escalate the issue later.
Step 4: File a Dispute with the Bank Directly
In some cases, ChexSystems may verify the information with the bank, but that doesn’t mean you’re out of options. You can take your dispute directly to the bank that reported you. This step involves reaching out to the bank or credit union and asking them to verify the accuracy of the report they submitted to ChexSystems.
Here’s what to do:
- Write a letter to the bank or credit union that reported you, explaining the error and requesting an investigation.
- Ask the bank to provide the original documentation they used to report your account to ChexSystems.
- If the bank can’t provide sufficient evidence, they may be required to remove the negative information from your record.
If the bank doesn’t respond or refuses to correct the error, you may need to escalate the issue to small claims court. Banks are required by law to report accurate information, so a lack of proper documentation could work in your favor if the case goes to court.
What to Do If the Bank Fails to Respond
If the bank doesn’t respond to your dispute or refuses to remove inaccurate information from your ChexSystems report, don’t worry—you still have options. While legal action is one route, it’s not your only choice, and there are other, simpler steps you can take before considering a lawsuit.
Here’s what you can do:
- Contact a consumer attorney: If you feel stuck or unsure of the next steps, reaching out to a consumer protection attorney can be a good move. Many attorneys offer free consultations and can help you understand whether you have a strong case without committing to a costly legal battle.
- Submit a complaint to the CFPB: The Consumer Financial Protection Bureau (CFPB) is a government agency that oversees banks and other financial institutions. If you’re getting nowhere with the bank, you can file a complaint with the CFPB, and they will investigate on your behalf. Filing a complaint is free and can often push the bank to resolve the issue more quickly.
- Consider small claims court: If you’ve exhausted other options, you can take the bank to small claims court. This is a more straightforward legal process where you don’t need a lawyer, and the court costs are generally lower. If the bank failed to properly verify or respond to your dispute, you may have a strong case to get the negative item removed from your ChexSystems report.
Exploring these options allows you to apply pressure on the bank and correct any errors without the need for immediate legal action. These steps often help speed up the process and get the issue resolved, making it easier for you to clear your ChexSystems record and move forward with your banking needs.
The Investigation: What to Do Next
After you file a dispute with the bank, they are required to conduct an investigation and provide you with the same information they initially gave to ChexSystems. This documentation is crucial to verify whether the debt is valid and accurately reported.
Once you receive the investigation results, here’s what you should do:
- Review the details closely: Check for inconsistencies in the information. Make sure the dates, amounts, and account numbers match up with your records.
- Look for missing documentation: If the bank can’t provide all the necessary paperwork to support the debt, you may have grounds to request the removal of the negative item from ChexSystems.
- Request removal: If the bank fails to provide proper evidence of your debt, send a follow-up letter asking for the derogatory information to be removed from both the bank’s records and your ChexSystems report.
- Consider legal action: If the bank still refuses to correct the report or provide sufficient proof, you might want to consult a consumer protection attorney. Sometimes the threat of legal action is enough to prompt the bank to act, as they are obligated to ensure their reporting is accurate.
By taking these steps, you increase your chances of resolving the issue and clearing your ChexSystems record more quickly. Don’t be discouraged—many people have successfully cleared their records and you can too.
